Midstream Ltd and Delta Ltd Enter into a Business Undertaking

question 11

Multiple Choice

Midstream Ltd and Delta Ltd enter into a business undertaking in which they each commit 50-hectare vineyards.There is a contractual agreement between the two companies whereby they share control and must agree on all strategic financial and operating decisions relating to the two vineyards.The two companies appoint Todman Management Pty Ltd as the manager of the vineyard undertaking.A separate set of accounting databases is established for the undertaking and each investor contributes additional cash capital to the undertaking and hold assets other than the vineyards as tenants in common.The intention of the investing companies is to take their proportionate share of the produce from the two vineyards to use in their own wineries.The business undertaking is:

• A) a joint venture operation because the investors have agreed to a sharing of control and to a sharing of the outputs of the vineyard.
• B) a joint venture entity because the undertaking has been established as a separate entity in which there is a simple sharing of control.
• C) a simple partnership in which two companies operate as partners in a business undertaking.
• D) none of the above.

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Definitions:

Tracheids

Tracheids are elongated cells in the xylem of vascular plants, serving to transport water and minerals as well as providing structural support.

Carbohydrates

Organic compounds made up of carbon, hydrogen, and oxygen, serving as a major source of energy for living organisms, and found in foods as sugars, starches, and fiber.

Preprophase Band

In plant cells, a dense array of microtubules just inside of the plasma membrane that appears just prior to mitosis and determines the plane in which the cell will divide.

Mitosis

Mitosis is a cell division process that results in two genetically identical daughter cells from a single parent cell, crucial for growth and tissue repair.